The US Labor Department on Thursday reported its Consumer Price Index advanced 0.2% last month after rising 0.4% in April. In the 12 months through May, the CPI increased 1.0% after rising 1.1% in April.

Economists had predicted a 0.3% increase in the CPI last month and a 1.1% rise from a year ago.

The so-called core CPI, which strips out food and energy costs, rose 0.2%, the same as April. That took the year-on-year core CPI rise to 2.2% from 2.1% in April.

The US central bank would like to see an inflation rate of 2% and tracks an inflation measure, which is currently at 1.6%. On Wednesday, the Fed kept interest rates unchanged and said it expected inflation to remain below its target through 2017. The Fed has hinted that it plans to raise rates two times this year, but after the new report more analysts think there will only be one.